The glossary of terms below will grow as this website develops. We have tried to keep the definitions as straightforward as possible, though this is not always easy, as it appears that many terms used in International Development are used in different ways by different people! As always, your feedback is welcomed. Please feel free to comment on the glossary terms and to make suggestions for additional items that need including. Just email the editor email@example.com
Countries in the process of joining the European Union (EU). The EU currently has 27 member countries. Croatia signed its accession agreement in December 2011 and is expected to become the 28th EU member on 1 July 2013. Iceland, Macedonia, Montenegro and Turkey are all official candidates states while Albania and Serbia have applied for membership. Several other countries are at various stages of negotiation (Montenegro, Bosnia and Herzegovina, Kosovo, Turkey, Iceland).
Subject to the obligation to report, explain, or justify something for which you are responsible.
Aid (also known as international aid, foreign aid, overseas aid)
A voluntary transfer of resources (e.g. funds, assets, skills) from the people of one country to another, with the objective of benefiting the recipient country.
The extent to which international aid achieves the desired impact, for example poverty reduction, economic development, or peace-making. Effectiveness can be documented quantitatively (e.g. increase in the number of immunised children) or qualitatively. Sustainability is also an increasingly important aspect of effectiveness.
Acquired Immune Deficiency Syndrome.
The process whereby a development partner (donor) supports a country’s national development strategy, and works through the country’s institutions and procedures. The donor thereby ‘aligns’ its objectives and method of working with those of the country.
Bilateral means “two sides”. This type of aid is from one country to another. An example would be the UK giving money and/or sending experts to help improve education in Nigeria.
A highly improbable event that is a surprise (to the observer) and has a major impact (good or bad). After the fact, the event is rationalized by hindsight.
An international political organisation of five leading emerging economies: Brazil, Russia, India, China and South Africa.
A form of aid whereby a donor provides funds to a recipient government which spends them through its own systems, not through donor-controlled projects. The support may be advanced to the government generally, or to a specific sector (e.g. health) or a specific program. The conditions of the aid include the need for the recipient government to account properly for its use of the funds.
Civil Society Organisations (CSOs)
Non governmental non-profit organisations, associations and networks of people who promote their common interests through collective action. CSOs include charities, foundations, volunteer groups, faith-based groups, trade unions and workers clubs, parents and teachers associations, senior citizens groups, sports clubs, arts and culture groups, think-tanks and “issue-based” activist groups.
A loan provided to a poor country at below market cost. The loan may have a low interest rate and/or a long ‘grace period’ before interest needs to be paid. The lender subsidises the difference between the actual cost and the fair market cost of the loan. This difference is known as the ‘grant element’ of the loan, as it is effectively a gift. Concessional loans are also known as a soft loan.
The nature of the conditions contained in a loan, grant or other agreement between a development partner and recipient. If any of these conditions are not fulfilled, the agreement has been broken and aid may be suspended.
[Note: You will often see the words ‘conditionality’ or ‘conditionalities’ incorrectly used instead of ‘condition’ or ‘conditions’.]
The recipient country takes the lead in designing and delivering a development program which is funded and supported by donor(s). [There are large variations in the extent to which programs are genuinely led by recipient countries].
Action taken to make the repayment of debt easier. Solutions which reduce the amount owed include: (i) cancellation of all or part of the debt (‘debt forgiveness’), or (ii) subsidised reduction of interest rates. Other solutions which make the timing of payments more manageable without reducing the overall cost include: (iii) rescheduling the timing of repayments, thus extending the period of the debt; and (iv) refinancing: repaying a debt by taking out a new loan.
Development Assistance Committee (DAC)
The Development Assistance Committee of the Organisation for Economic Co-operation and Development is an international forum of many of the largest funders of aid. There are 24 members (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States and European Union Institutions). The World Bank, IMF and UNDP participate as observers.
DAC has the mandate to promote development co-operation and other policies so as to contribute to sustainable development.
A donor country or institution. See donor.
Direct Budget Support
See Budget Support.
The term donor means someone who gives. Donors can be individuals, governments or organisations. In International Development the term is often loosely used to include all those who fund aid, thus including lenders as well as givers.
A term describing the effect when large inflows of foreign currency from a booming sector cause a long term decline in other sectors. The original and most usually quoted example is that when oil and gas are discovered, extracted and exported, the nation’s currency increases significantly, making other exports, especially manufacturing and agriculture, less competitive, and resulting in a decline in these industries. The booming sector can also cause an increase in wage rates and attract labour away from more traditional industries, accentuating their decline.
Dutch disease can occur whenever significant deposits of any valuable raw materials are discovered, and the concept can also be applied to argue that foreign currency receipts from international aid can play a significant role in destroying traditional businesses.
Also known as humanitarian assistance. Assistance given during an emergency situation, for example after a disaster such as an earthquake, flood or drought, in order to help the affected population survive and recover. Includes food, clean water, shelter, medical care, organisational help and provisions for displaced people. This type of assistance is not given as long term aid because local farmers and business people would not be able to compete with the free handouts and the local economy would be damaged. Nevertheless, it is argued that there should be greater coordination between emergency aid and long term aid because the ‘handover’ is too often unplanned.
European Development Fund (EDF)
The main instrument for European Union (EU) aid for development cooperation in Africa, the Caribbean, and Pacific (ACP Group) countries and the Overseas Countries and Territories (OCT). Funding is provided by voluntary donations by EU member states.
Evidence based practice
The viewpoint that practical decisions made should be based on research studies using statistical analysis to determine the effectiveness of different possible approaches. Evidence based practice started with medicine and has spread to social sciences and to the selection and evaluation of approaches to international development.
Following the process by which biological evolution works, evolution applied to a project or organisation implies experimenting with some variants on the existing situation, closing down failed approaches and copying successful ones.
The effect of a decision on a party who did not have a choice and whose interests were not taken into account.
- Negative externality example: Pollution, generated by a factory and causing damage to crops, buildings and public health: affecting citizens who had no choice and were not taken into account.
- Positive externality example: A beekeeper keeps bees for their honey. The value generated by the pollination of surrounding crops by the bees may be higher than the value of the harvested honey.
A low income country where the government does not deliver core services to most of its people, either because it lacks the capacity to do so or because it chooses not to. The people are thus vulnerable to adverse economic or environmental conditions, and the state is vulnerable to civil unrest.
Fungibility of aid refers to the situation where receipt of funds from a donor for a specific purpose (e.g. education) allows the recipient country’s government to reduce its own expenditure in that area and to spend its money on something else. This problem is most notorious when a recipient government is able to switch its expenditure to military equipment or status symbols (e.g. a presidential jet or a new palace) but it can also have tragic consequences if a government becomes dependent on donors to support a sector and that support is later withdrawn for political reasons. Addressing the problem of fungibility is a key concern for all donors.
The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established to bring together leading industrialized and developing economies to discuss key global economic issues. The G-20 represent 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, United Kingdom, United States and Turkey) and the European Union. Their heads of government or heads of state have also periodically conferred at summits. Together, the G-20 economies are estimated to account for more than 80% of global gross national product (GNP),80% of world trade and 66% of the world population.
The Group of Eight (G-8) is a forum for the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. In addition, the European Union is represented within the G-8, but cannot host or chair the meetings. Collectively, the G8 nations account for approximately half of global GDP. Countries from the ‘Outreach Five’ (Brazil, People’s Republic of China, India, Mexico, and South Africa) have participated as guests in meetings, which are sometimes called G8+5.
At their Pittsburgh summit meeting in 2009, the G-20 (see above) announced that they would become the new permanent council for international economic cooperation. The G-8 will continue to meet to discuss major security issues.
General Budget Support
See Budget Support and Poverty reduction budget support
The increasing interconnectedness of world cultures, peoples and economic activity. Globalisation is driven to a large extent by technological advances and information exchange, combined with agreed reductions in the barriers to international trade (tariffs and quotas) and foreign investment, and increased migration and movement of people.
Gross Domestic Product (GDP)
The total monetary value of all products and services produced in a given year within a defined territory (e.g. country or state). GDP includes all private and public consumption, government outlays, investments and exports less imports that occur within the defined territory.
Gross National Income (GNI)
The total monetary value of all products and services produced in a given year by labour and property supplied by the residents of a country or state. Unlike Gross Domestic Product(GDP), which defines production based on the geographical location of production, GNP allocates production based on ownership.
Donor countries co-ordinate their aid, use common or similar procedures and share information, to ensure they are not duplicating work or placing unnecessary demands on their developing country partners.
Heavily Indebted Poor Countries Initiative (HIPC)
An initiative launched by the International Monetary Fund and the World Bank in 1996 to provide debt relief to the most heavily indebted poor countries. The aim was to ensure that no poor country would face a debt burden it could not manage. Since then multilateral organizations and governments have worked together to reduce debt for these countries to sustainable levels. There have been a number of other initiatives to supplement HIPC.
Human Immunodeficiency Virus.
See Emergency Aid.
The World Bank classifies economies and countries by gross national income (GNI) per capita (i.e. GNI per person). Every economy is classified as low income, middle income (subdivided into lower middle and upper middle), or high income. Other analytical groups based on geographic regions are also used. Low-income and middle-income economies are sometimes referred to as developing economies but classification by income does not necessarily reflect development status. The groups are:
- low income: $1,005 or less;
- lower middle income: $1,006 – $3,975;
- upper middle income: $3,976 – $12,275; and
- high income: $12,276 or more.
Independent Commission for Aid Impact (ICAI)
The independent body responsible for scrutiny of UK aid, launched in 2011. ICAI focuses on maximising the impact and effectiveness of the UK aid budget for recipients and the delivery of value for money for the UK taxpayer.
Intellectual Property Rights
Intellectual Property Rights enable individuals or organisations to claim ownership of ideas and inventions and to prevent others from copying them or to charge for using them. The main categories of Intellectual Property Rights are patents, trademarks, industrial designs and copyrights. They are governed by national and international systems and laws.
Intergovernmental Panel on Climate Change (IPCC)
IPCC is the leading international body for the assessment of climate change. It was established by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) to provide the world with a clear scientific view on the current state of knowledge in climate change and its potential environmental and socio-economic impacts.
Internally Displaced Persons (IDPs)
People who have been forced to leave their homes (e.g. because of war, natural disaster, or violations of human rights) but who remain within their country’s borders. They are sometimes wrong called refugees, but refugees are people who have fled to other countries.
International Aid Transparency Initiative (IATI)
IATI aims to make information about aid spending easier to access, use and understand. Its purpose is to help implement the transparency commitments made at the Accra Agenda for Action in the most consistent and coherent ways.
International Development Association (IDA)
IDA is the part of the World Bank that helps the world’s poorest countries. It aims to reduce poverty by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions.
International Monetary Fund (IMF)
IMF’s main purpose is to work for global financial stability. It does this by:
- providing a forum for cooperation on international monetary problems;
- facilitating the growth of international trade, thus promoting job creation, economic growth, and poverty reduction;
- promoting exchange rate stability and an open system of international payments; and
- lending countries foreign exchange when needed, on a temporary basis and under adequate safeguards, to help them address balance of payments problems.
Least Developed Country (LDC)
LDCs are those countries which, according to the United Nations, have the lowest levels of socio-economic and human development. A country is classified as a LDC if it meets three criteria:
- Low-income: a three-year average GNI per capita of less than US $905, which must exceed $1,086 to leave the list);
- Human resource weakness: based on indicators of nutrition, health, education and adult literacy); and
- Economic vulnerability: based on instability of agricultural production, instability of exports of goods and services, economic importance of non-traditional activities, merchandise export concentration, handicap of economic smallness, and the percentage of population displaced by natural disasters.
Low Income Countries
Countries in the Low Income Group, as defined in Income Groups (see above).
Managing for results
Management strategies that focus on performance and improvements in outcomes and provide a framework in which performance information is used for improved decision making. (See ‘outcomes’, below).
Managing for Development Results (MfDR)
Managing for development results (MfDR) is an approach that involves practical tools for planning, risk management, monitoring and evaluation. It shifts the focus from inputs and immediate outputs (“how much money will I get, how much can I spend?”) to performance and achievement of outcomes and long-term impacts (what can I achieve with the money?). In the Paris Declaration, donors and partner countries committed to use the MfDR approach – partners to strengthen the linkages between strategies and budgets, and to establish results-oriented reporting and assessment frameworks; and donors to link country programming to results and align them with partners’ assessment and monitoring frameworks, and harmonise reporting requirements.
Middle Income Countries
Countries in the lower middle and upper middle income groups (see Income Groups).
Millennium Development Goals
A set of eight international development goals for 2015, adopted by the international community in the UN Millennium Declaration in September 2000, and endorsed by IMF, World Bank and OECD:
1. Eradicate extreme poverty and hunger; 2. Achieve universal primary education; 3. Promote gender equality and empower women; 4. Reduce child mortality; 5. Improve maternal health; 6. Combat HIV/AIDS, malaria and other diseases; 7. Ensure environmental sustainability; 8. Develop a global partnership for development.
The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information, or has an incentive to take unusual actions or risks.
Multilateral means ‘many sides’. These are agencies established by intergovernmental agreement, which are independent of the interests of any single country. Three institutions – the European Commission, the World Bank and the United Nations – account for about 30% of global aid.
Aid dispensed by multilateral agencies. Member countries contribute to the multilateral agencies, which then decide where and how the aid should be applied. The exception is that aid channelled through a multilateral agency is regarded as bilateral if a donor country specifies the use and destination of the funds.
Non governmental organisations (NGOs)
NGOs are private non-profit making bodies which are active in development work. They vary in size from small community groups through national to international organisations. In some countries the use of the term NGO may need to conform to legal or other conditions. For example, in the USA domestic organisations are usually called non-profit organizations (NPOs), the term NGO being reserved for international organisations. In the UK NGOs must be registered charities in order to qualify for official support.
Organisation for Economic Co-operation and Development (OECD)
A forum of 34 countries founded in 1961 to stimulate economic progress and world trade. It is committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies of its members.
Partner countries exercise effective leadership over their development policies and strategies and co-ordinate development actions.
The Paris Declaration is an international agreement in which over 100 countries and organisations committed to continue to increase efforts in harmonisation, alignment and managing aid for results with a set of monitorable actions and indicators.
Paris Declaration baseline survey
The Paris Declaration is an ambitious set of 56 commitments group under five principles of ownership, alignment, harmonisation, management for development results and mutual accountability. The Declaration includes 12 indicators with targets to monitor progress. These were assessed in a baseline survey in 2006 and 2008.
Poverty reduction budget support
Poverty reduction budget support is a form of financial aid in which funds are provided directly to a partner government’s central exchequer to support that government’s programmes. This can be in the form of general budget support (not directed at particular sectors) or sector budget support.
The platform approach to programme management aims to implement a package of measures or activities designed to achieve increasing levels (‘platforms’) of competence over a manageable timeframe. Each platform establishes a clear basis for launching to the next, based on the premise that a certain level of competence is required to enable further progress to take place. Originally introduced on the Public Financial Management Reform Programme in Cambodia.
Poverty Reduction Strategies
Poverty Reduction Strategies are prepared by developing country governments in collaboration with the World Bank and International Monetary Fund as well as civil society and development partners. These documents describe the country’s macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs and major sources of financing.
A measure of how predictable flows of aid to developing partner countries are. This includes the extent to which aid promised within a given year is delivered and how many years in the future donors provide information about aid to be provided.
Programme aid is financial assistance specifically to fund (i) a range of imports, or (ii) an integrated programme of support for a particular sector, or (iii) discrete elements of a recipient’s budgetary expenditure. In most cases, support is provided as part of a World Bank/International Monetary Fund co-ordinated structural adjustment programme.
Programme-based approaches are funds provided to a sector to deliver a single programme, led by the partner country, with a single budget and a formal process for donor co-ordination, and that make efforts to increase the use of developing partner countries’ systems.
Public financial management
A PFM system has three key objectives: to maintain fiscal discipline (securing stewardship), keeping spending within limits created by the ability to raise revenue and keeping debt within levels that are not prohibitively expensive to service; to promote strategic priorities (enabling transformation) – allocating and spending resources in those areas that make the greatest contribution to the government’s objectives; and to deliver value for money (supporting performance) – efficient and effective use of resources in the implementation of strategic priorities.
Public Private Partnership
A Public Private Partnership brings public and private sectors together in partnership for mutual benefit. The term ‘Public Private Partnership’ covers a wide range of different partnerships, including the introduction of private sector ownership into businesses that are currently state-owned, the Private Finance Initiative, and selling Government services into wider markets.
Public Service Agreement
A set of measurable targets for the work of a government ministry or department, giving a basis for accountability.
Researchers who believe that it is vital to collect evidence on the impact of possible new development initiatives, that this evidence should be collected using randomised control trials, and that (in most cases) aid should be confined to projects that such evidence supports.
The Geneva Convention says that a refugee is a person who:
“Owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside his country of nationality and is unable or, owing to such fear is unwilling to avail himself of the protection of that country; or who, not having a nationality and bring outside the country of his former habitual residence as a result o such events, is unable or, owing to such fear is unwilling to return to it.”
Regional Development Banks
International Development Banks which serve particular regions, for example the Asian Development Bank, the African Development Bank and the European Bank for Reconstruction and Development.
Remittances are monies sent from one individual or household to another. International remittances are those sent by migrant workers who left their home country. Domestic remittances are those sent by migrant workers who left their home village or town to work elsewhere in their home country (e.g. rural-urban migration; sometimes also referred to as national remittances). Communal or collective remittances are monies sent by migrant associations or church groups to their home communities. Typically remittances are in cash rather than goods. Imports or goods purchased on location are, however, also common.
One of the areas of a recipient country’s economic or social structures that aid is intended to support (e.g. Economic, Education, Health, Governance, Social, Rural Development, Environment, etc).
Sector wide approaches or sector investment programmes
A sector wide approach (SWAP) is a process that entails all significant donor funding for a sector supporting a single, comprehensive sector policy and expenditure programme, consistent with a sound macro-economic framework, under recipient government leadership. Donor support for a sector wide approach can take any form project aid, technical assistance or budgetary support although there should be a commitment to progressive reliance on government procedures to disburse and account for all funds as these procedures are strengthened.
The security sector is defined as those who are, or should be, responsible for protecting the state and communities within the state. This includes military, paramilitary, intelligence and police services as well as those civilian structures responsible for oversight and control of the security forces and for the administration of justice.
Service Delivery Agreement
A document which defines the outputs and subsidiary targets which will contribute towards delivery of the targets in the Public Service Agreement.
A simple mnemonic to assist understanding of the characteristics of effective objectives or targets. Objectives should be SMART (Specific, Measurable, Achievable, Realistic and Timebound).
See concessionary loan.
The capacity to endure. Sustainable development means achievement of improved results which will continue after new initiatives have been implemented. It can be broken down into three constituent parts: environmental sustainability, economic sustainability and socio-political sustainability.
See Sector Wide Approach.
Technical Co-operation/Technical Assistance
Technical co-operation is the provision of advice and/or skills, in the form of specialist personnel, training and scholarship, grants for research and associated costs.
The practice of insisting that aid is spent on goods and services from the donor country. In this type of aid the giving (or donor) country also benefits economically from the aid. This happens as the receiving country has to buy goods and services from the donor country to get the aid in the first place. In building a dam, for example, the donor country may insist that its companies, experts and equipment are used.
United Nations Framework Convention on Climate Change. This represents the international community’s collective response to climate change. It was established at the 1992 UN Conference on Environment and Development which was held in Rio.
Aid that is given where donors do not insist that it is spent on goods and services from the donor country, in favour of giving unrestricted access to those who can compete on best price, quality and service.
Value for money
Obtaining the maximum benefit with the resources available. Achieving the right balance between economy, efficiency and effectiveness. It can be achieved in various ways including:
- reducing costs (e.g. labour costs, better procurement and commissioning) for the same outputs
- reducing inputs (e.g. people, assets, energy, materials) for the same outputs
- getting greater outputs with improved quality (e.g. extra service or productivity) for the same inputs
- getting proportionally more outputs or improved quality in return for an increase in resources.
The term World Bank is commonly used to refer to the International Bank for Reconstruction and Development and the International Development Association. Three other agencies are also part of the World Bank, the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Centre for Settlement of Investment Disputes. Together these organisations are referred to as the World Bank Group.
World Trade Organisation
The World Trade Organisation exists to ensure that trade between nations flows as smoothly, predictably and freely as possible. To achieve this, the World Trade Organisation provides and regulates the legal framework which governs world trade. Decisions in the World Trade Organisation are typically taken by consensus among the 146 member countries and are ratified by members’ parliaments.